This form is used when royalty owners are the owners of royalty and mineral interests in Tracts 1 and 2, subject to the terms of Lease 1 and Lease 2. Recognizing that each of the Royalty Owners may not own an Interest in both Tracts 1 and 2, or may not own an identical Interest in Tracts 1 and 2, it is their desire, together with Lessee, to pool and unitize these two Tracts for oil and gas operations.
A Kentucky Pooling Agreement Between Lessee and Royalty Owners on Two Tracts, With Depth Limitation refers to a legally binding contract that governs the joint exploration, production, and distribution of oil or gas resources from two separate tracts of land in Kentucky. This agreement typically involves a lessee or an oil and gas operator who holds the rights to extract resources from these tracts and multiple royalty owners who own a stake in the production. The primary purpose of this pooling agreement is to combine the individual tracts of land into a single unit for efficient drilling and mining operations. By pooling the resources, the lessee can maximize production and minimize costs, which ultimately benefits all parties involved. This agreement also ensures that royalty owners receive their fair share of revenue generated from the extraction activities. The key components of a Kentucky Pooling Agreement Between Lessee and Royalty Owners on Two Tracts, With Depth Limitation may include: 1. Identification of Parties: The agreement should clearly identify the lessee and all royalty owners involved in the pooling arrangement. 2. Description of Tracts: It should provide a detailed description of the two tracts of land involved in the pooling agreement, including boundaries, legal descriptions, and any relevant lease or ownership details. 3. Depth Limitation: This clause sets a specific depth limit for drilling operations, specifying the maximum depth where the lessee can extract resources. This helps protect the rights and interests of royalty owners who may have rights to resources at different depths. 4. Pooling and Unitization: This section outlines the pooling process and the creation of a production unit, which combines the two tracts into a single entity for efficient resource extraction. 5. Royalty Ownership and Payment: It specifies the percentage or fraction of royalties that the royalty owners are entitled to, based on their ownership interest in the pooled unit. It should also outline the payment terms and schedule for royalty distributions. 6. Operations and Expenses: This section defines the responsibilities and obligations of the lessee for conducting drilling, mining, and production activities. It may also detail how expenses related to operations, maintenance, and surface damages will be shared among the parties. 7. Term and Termination: The agreement should establish the duration of the pooling arrangement and conditions under which it can be terminated, such as non-compliance with regulations, expiration of lease terms, or mutual agreement. Types of Kentucky Pooling Agreement Between Lessee and Royalty Owners on Two Tracts, With Depth Limitation may vary depending on specific conditions, including: 1. Pooled Unit Size: Pooling agreements could involve various unit sizes, such as joint development of a small portion of two tracts or the creation of a larger unit encompassing multiple tracts. 2. Oil or Gas Extraction: Pooling agreements can be tailored for either oil or gas extraction, as the terms and conditions may vary for each type of resource. 3. Additional Restrictions: Some agreements may include additional limitations or restrictions, such as environmental considerations, drilling techniques, or requirements for surface protection. 4. Lease Provisions: The agreement may involve different lease provisions, including royalty rates, lease duration, and surface rights, which can impact the terms of the pooling arrangement. In conclusion, a Kentucky Pooling Agreement Between Lessee and Royalty Owners on Two Tracts, With Depth Limitation is a crucial document for effectively extracting and distributing oil or gas resources from multiple tracts of land. It ensures fair compensation for all parties involved and promotes efficient resource utilization while adhering to legal and regulatory requirements.
